Brexit

Throughout the last four years, you could be forgiven for thinking that everyone in Britain has been extremely passionate about Brexit one way or another. The truth is, most people are sick to death of the whole debate. This was the reason ‘Get Brexit Done’ was such an effective slogan; most voters wanted the topic laid to rest. It is this general apathy that I believe is informing Keir Starmer’s approach to Brexit as Labour leader, combined with the knowledge that while most people are sick of Brexit, we are about to enter a whole new phase of it that can’t be ignored. Passionate Remainers complain that Starmer hasn’t been anti-Brexit enough since he became leader – where was the plea to extend the transition period?

Ever since Keir Starmer became Labour leader, there have been calls for him to publicly embrace Brexit to win back seats in the ‘Red Wall’. Starmer has stayed quiet on Europe since his victory, to the consternation of many Remainers who wanted him to push the importance of extending the transition period, before that opportunity passed. This silence has been wise on Starmer’s part – and he should continue to stay silent on the European question for the time being. The calls for Starmer to announce that he’s converted to Brexit misunderstand several things, including: the nature of the electoral coalition Starmer needs to build, why Red Wall seats fell in December, and how Brexit plays out from here.

Anyone who imagined that the departure of Britain would make for more harmonious EU summits in future will have been disabused of this belief by the four days of meetings to establish an EU coronavirus recovery fund, which came within an hour of being the longest on record. Agreement was reached on a €750 billion package — just over half of which will be made up of grants and the rest loans — but not before the French President, Emmanuel Macron, had reportedly thumped the table and accused a group of countries of putting the entire European project at risk through their refusal to sign for an even higher sum. Even now, the deal might still run into trouble: the European parliament is already voicing objections.

Politics begins and ends with sovereignty: the duty and right to make the legitimate final decision. We have seen this clearly during the pandemic. In every country, people have come to depend on their governments, whose authority rests on acknowledged sovereignty. This is as true, or even truer, in democracies: while monarchs and aristocrats could dispute sovereignty – and, where it suited them, divide up the cake amongst themselves – in a democracy there can only be one ultimate sovereign: the people. No sovereignty, no democracy. For years we have been told the illusion, if not a fraud, that sovereignty can be ‘pooled’. Who takes the final decision when sovereignty is ‘pooled’? If we cannot answer that question, then it shows the fallacy.

Trade talks between the UK and the EU are in a better place than they have been at any point since they started back in March. Now, in one way this is not impressive — the diplomatic equivalent of being the tallest mountain in Holland. For the first three months of these negotiation both sides were bullish, restating their maximalist positions, and coronavirus forced the negotiations online, making diplomacy and quiet compromise trickier. But now an intensive series of talks have been agreed, some of which will be face to face. Both sides appear to be in earnest about trying to break the deadlock. The British side is, privately, far more optimistic than it has been at any previous point in the negotiation.

One of the greatest prizes from Brexit is the opportunity to make the Global Britain aspiration a reality. Included is a leadership role at the World Trade Organisation (WTO) where the UK, the fifth biggest economy in the world, could help drive much-needed progress to facilitate global trade. Leadership, however, requires respect to back it up. In trade terms, that means walking the talk of trade liberalisation at home. Once free of the EU, the UK knows that its thriving farming sector will therefore require access to global markets. But the trade agreements to deliver that access must be consistent with WTO rules. Recent talk of the UK adopting a tiered tariff system, based on perceptions of animal welfare and health standards, would be a direct breach of those rules.

The combination of Covid-19 and Brexit is a double whammy. The first was a haymaker that hit Britain from nowhere. The follow up will come when Britain, quite deliberately and with malice aforethought, winds up its fist and punches itself in the face. The economic impact of the virus will be accentuated by the UK leaving the EU without a deal or with a meagre free-trade agreement, warns a grim report, sponsored by the Best for Britain think tank. Business leaders do not generally get much sympathy. Watch any thriller made in the last two decades and as soon as the corporate executive appears on screen you can guess with a fair degree of certainty that the hero will unmask him as the villain in the final reel. They deserve our sympathy now.

The old division of leaver and remainer will not serve the best interests of the country as we go forward. That truth might be emotionally hard to accept, but it will remain true. We need now to adapt to the real challenges the future holds. One of the most pressing is our future relationship with the EU – and that is being negotiated again on Monday. I have written on how we should support the EU given the recent judgment of the German Constitutional Court on the question of the European Central Bank bond scheme. The case is complicated and while I enjoy a good legal fight over complex financial products, I appreciate many do not. But, as is often the case in law, the reason it is important has nothing to do with its subject matter.

It would have to close down its factories. Thousands of job would be lost. Suppliers would be abandoned, and the local economy would be shattered for a generation. It was sometimes a little hard to work out why a few hardcore Remainers cared quite so much about Nissan. Its range of mid-market, family SUVs were not the kind of cars they would usually be seen dead in. But somehow the company became emblematic of the whole bitter debate about how the British economy would suffer if we left the European Union. If we weren’t in the Single Market, we were told again and again, the business was doomed. So today’s news from the company is, to put it mildly, slightly surprising.

David Frost briefed the Cabinet yesterday on the state of the Brexit negotiations and he has now issued a very downbeat statement. Boris Johnson’s chief Brexit negotiator says that the third round of negotiations ‘made very little progress’. The problem is that (as always in these talks) the UK and the EU have very different interpretations of what is reasonable. The UK thinks that because it ‘just’ wants a free trade agreement it shouldn’t be expected to follow EU rules in a host of areas and should be offered a deal similar to what Canada, South Korea or Japan have. The UK has even accepted that this deal might see some tariffs imposed.

David Frost, the Prime Minister’s chief Brexit negotiator, has held discussions with the First Secretary of State Dominic Raab and other senior ministers in the last few days. As I say in tomorrow’s Spectator, the conclusion of these discussions has been that the UK will not request an extension to the transition period. Interestingly, I understand that no one in these discussions backed asking for an extension. The thinking is that a delay would not solve the fundamental policy problems and that a deal is either possible or not. Another factor, I understand, is that the government worries about the cost of any extension.